35)Howdy-Dowdy Corp just began business and made the following four inventory purchases in June: June 1 150 units $ 1,040 June 10 200 units 1,560 June 15 200 units 1,680 $ 4,280 A physical count of merchandise inventory on June 30 reveals that there are 220 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is a)$1,508 b)$1,836 c)$1,456 d)$1,824
35)Howdy-Dowdy Corp just began business and made the following four inventory purchases in June: June 1 150 units $ 1,040 June 10 200 units 1,560 June 15 200 units 1,680 $ 4,280 A physical count of merchandise inventory on June 30 reveals that there are 220 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is a)$1,508 b)$1,836 c)$1,456 d)$1,824
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
35)Howdy-Dowdy Corp just began business and made the following four inventory purchases in June:
| June | 1 | 150 units | $ 1,040 |
| June | 10 | 200 units | 1,560 |
| June | 15 | 200 units | 1,680 |
| | $ 4,280 |
A physical count of merchandise inventory on June 30 reveals that there are 220 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is
a)$1,508 b)$1,836 c)$1,456 d)$1,824
Expert Solution
Step 1
It is given that the company uses the FIFO method (First in First out) which means the inventory which is purchased first will be sold first.
Hence ending inventory of 220 units belongs to the last purchases.
Computation of amount allocated to ending inventory for June is as follows:
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education